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Fundrise offers automated real estate investing for those with at least $10.
Fundrise;Alyssa Powell/Business Insider
Bottom Line: Fundrise could be a good fit for investors looking to make long-term investments in illiquid real-estate assets. The platform accepts clients regardless of annual income or net worth. You’ll simply need to meet the minimum balance requirements and be able to pay account fees. Prospective users should note, however, that its investments are intended for those with a time horizon of at least five years.
Overall rating
FeaturesInsider rating (out of 5)Fees4.50Investment selection4.75Liquidity4.00Ethics5.00Access4.88Customer service4.00Overall score4.53
Is Fundrise right for you?
Fundrise is a crowdfunding platform that lets you invest in commercial real estate projects across the US. In addition to IPOs, you can invest in a combination of the company’s two primary investments – eREITS, or electronic real estate investment trusts, and eFunds, or electronic real estate funds – but you’ll need at least $10 to begin.
It also has an investment team that works directly with real estate developers, manages client portfolios, and handles real estate deals.
Headquartered in Washington, D.C., Fundrise offers investors access to real estate project throughout all 50 states. The platform also provides desktop and mobile access, allowing users to monitor asset growth and review market trends and project alerts. The Fundrise mobile app is available on iOS and Android devices.
As mentioned above, one thing to look out for is that — although you can cash out at any time — Fundrise’s investments are designed for those with a minimum time horizon of five years. If you’re looking for assets that are more liquid by design, you’ll want to consider other options.
Fundrise vs. CrowdStreet
Fundrise
Crowdstreet
Min. Investment
$10
Min. Investment
$25,000
Fees
1% (additional $125 for IRAs)
Fees
1% – 2.75%
Investment choices
Electronic real estate investment trusts (REITs), electronic real estate funds, and Fundrise IPOs
Investment choices
Single-sponsor real estate funds, Crowdstreet funds, individual deals, and managed portfolios
FundriseCrowdstreet
Fundrise and CrowdStreet are both popular platforms for both real estate assets. But the investing platforms vary when it comes to fees and investment choices.
If you’re looking for a low-cost, automated platform that offers REITs and other inexpensive real estate funds, Fundrise is a good choice. CrowdStreet has a much higher minimum ($25,000), but it offers an array of real estate funds, with the option of managed portfolios. But CrowdStreet is only available to accredited investors (i.e., individuals with a $1 million net worth or $200,000 annual salary [$300,000 for couples]).
Funrise vs. Yieldstreet
Fundrise
Yieldstreet
Min. Investment
$10
Min. Investment
$5,000 – $10,000
Fees
1% (additional $125 for IRAs)
Fees
1% to 2% for Prism Fund; other investments start at 0%
Investment choices
Electronic real estate investment trusts (REITs), electronic real estate funds, and Fundrise IPOs
Investment choices
Multi-asset class funds, alternative investments, and short-term notes
FundriseYieldstreet
Compared to Fundrise, Yieldstreet is a better choice for alternative investments. Besides real estate investments, it also offers fine art and multi-asset class funds. But Yieldstreet has a higher minimum than Fundrise, and isn’t the best choice for investors solely focused on automated REIT investing.
Fundrise is the best choice for low fees, REITs, and automated investing.
Ways to invest with Fundrise
Starter Portfolio
You’ll only need $10 to begin investing at Fundrise. With $10, you can set up a Starter Portfolio and gain access to a diverse mix of US real estate projects. As for fees, you’ll pay a 0.15% annual investment advisory fee and a 0.85% annual asset management fee.
Fundrise primarily offers eREITs and eFunds, but for Starter Portfolios, you’ll be investing in an equally allocated blend of the company’s Growth eREITs and Income eREIT II. You’ll earn returns through quarterly dividends and appreciation of share value.
Basic account level
With a $1,000 minimum requirement, this account level gives you access to auto-invest and dividend reinvesting, investment goals, IRA investing, and Fundrise IPO investing. And like the Starter account level, you can get up to 90 days of no fees when you invite new clients to Fundrise.
Core plans
Fundrise’s Core plans are a bit more expensive than its Starter portfolios – they include a $5,000 minimum investment requirement – but they offer access to more investment strategies and account features. Core portfolios offer three different investment plans: Supplemental income, Balanced investing, and Long-Term Growth.
Each plan comes with a varying portfolio allocation and expected return rate. For example, Supplemental Income plans typically utilize a larger percentage of income-focused assets than they do growth-focused assets. Balanced plans employ an equal blend of both, and Long-Term Growth plans rely more on growth-focused assets.
Fundrise’s growth-focused assets direct more attention to appreciation and pay less attention to dividends. For instance, for Long-Term Growth plans, Fundrise primarily uses growth eREITs and another asset called eREIT XIV.
All three plans also offer IRAs, auto-invest and dividend reinvestment, and discounts for referrals.
Advanced and Premium account levels
Fundrise Advanced account level includes a $10,000 minimum investment requirement, but it offers Plus plans which function as add-ons to each Core plan. This account basically offers the same features as the Core plans. The only difference is that it allows you to allocate a percentage of your portfolio to more complex real estate funds and strategies.
The Premium account essentially functions as an add-on to the Advanced account level. With a $100,000 minimum investment, you can not only utilize all of the Advanced account’s features, but you also gain priority access to Fundrise’s investment team.
Premium accounts also offer access to specialized, private equity funds that carry longer time horizons.
Self-directed IRAs
Fundrise partners with Millennium Trust Company to provide IRAs and digital investing solutions. You’ll need to transfer an existing IRA in order to invest in real estate funds. Once you set up your account, you’ll be able to invest in commercial real estate with eREIT products.
In addition to the combined 1% annual fees, you’ll pay a $125 fee if you decide to invest in multiple eREITs or invest through one of Fundrise’s plans. However, you’ll pay a $75 fee to Millennium for a single Fundrise eREIT.
It’s also important to note that Fundrise’s IRAs are currently only eligible to invest in eREITs, not eFunds.
Fundrise IPOs
Fundrise offers another investment option – itself. You can purchase shares of the company as long as you’ve got a Core account level or higher. The firm says it plans to make its IPO available to account holders within their first year of investing.
Since Fundrise has a parent company, Rise Companies Corp., you’ll be purchasing stake in both Fundrise and Rise.
Is Fundrise trustworthy?
Fundrise has received an A+ rating with the Better Business Bureau. BBB ratings range from A+ to F, so Fundrise’s A indicates that the company interacts well with its customers, promptly acknowledges and settles customer complaints, and exhibits trustworthy business practices.
The BBB assigns its ratings by assessing company information from business and public data sources and reviewing any customer complaints filed against the company. These ratings tend to vary per investment app.
Fundrise hasn’t elicited any major lawsuits or public scandals since its founding. The app has had 21 complaints filed against it in the last three years. In the last 12 months, it’s closed six complaints, according to BBB data.
Fundrise — Frequently asked questions (FAQ)
What is the average return from Fundrise?
Fundrise returned 22.99% in 2021, and its 2022 year-to-date returns through Q3 are 5.40%.
Does Fundrise pay you monthly?
Fundrise says users may start earning dividends immediately after they make an investment. It usually distributes dividends quarterly (although dividends may not always be guaranteed). It distributes these in the middle of the month after quarter-end, according to its website. In other words, you can expect to receive dividends in April, July, October, and January.
Can Fundrise be trusted?
Fundrise is a legitimate business that has operated since 2010. It’s also a limited liability company, and its manager, Fundrise Advisors, LLC, is registered with the US Securities and Exchange Commission (SEC).
And as mentioned above, its record is clear of lawsuits. Plus, it has an A+ rating with the Better Business Bureau.
Related terms
REITs: These are companies that own multiple income-producing real estate assets. They pool investor money together to fund the real estate projects, and investors receive dividends in exchange.Accredited investor: Someone with the “accredited investor” status has either earned at least $200,000 for the current year and prior two years ($300,000 for couples), or has a net worth of at least $1 million.SDIRA: Like regular IRAs, you can establish a traditional or Roth SDIRA. The difference is that these accounts allow you to build wealth through alternative assets like real estate, precious metals, and cryptocurrencies.Illiquid: Something is illiquid when it can’t be easily converted to cash. An illiquid asset could represent property or other tangible investments.